Alfred Herbert (India) Ltd Management Discussions

The Shareholders have been aware that since Financial Year 2019-2020 the Presentation of your Companys Financial Statements have significantly changed with the implementation of IND AS. Under IND AS, profit or loss on actual sale of Equity Investments and net gain or loss on fair value changer are recorded in Other Comprehensive Income [OCI] instead of being routed through the Statement of Profit and Loss. These gains [net of taxes] are subsequently reclassified from OCI to retained earnings. Thus, the income from Operations of our Company, being an Investment Company, includes mainly Dividends and Interest Income.

To augment the Operating Income over the medium term your Company plans to let out a part of the property in Strand Road and increase its investments significantly for greater dividend and interest income. This forms part of our endeavor to increase operating income earning capacity.

The "WORLD ECONOMIC OUTLOOK UPDATE" Report by the IMF of January 2025, stated that global growth is projected to remain stable at about 3.3% both in 2025 and 2026. However, the potential ramification of policies proposed by United States [US] has given rise to considerable uncertainty leading to lower expectations of global growth.

The volatility in the global economic scenario has become a defining feature of recent years, driven by factors such as geopolitical tensions, fluctuating energy prices, inflationary pressures, climate events and shifting monetary policies. Such volatility disrupts global supply chains, impacts investor confidence and leads to uncertainty in financial markets. For businesses and Government alike, it complicates longterm planning and increases the cost of capital. Currency fluctuations and trade imbalances can further strain emerging economies. Overall, global economic volatility heightens the risks associated with investment, slows down growth trajectories and requires more resilient and adaptive economic strategies to safeguard stability.

India continues to stand out as a beacon of economic strength and resilience in the global landscape. As the worlds fifth-largest economy, it is well-positioned to maintain its status as the fastest-growing major economy, with GDP growth projected at a robust 6.5% for FY26. This momentum is supported by strong domestic consumption, a stable macroeconomic environment, and healthy foreign exchange reserves. Inflation remains within manageable levels, and the interest rate environment has stabilized, fostering a conducive backdrop for both public and private sector investment.

Indias growth story is underpinned by structural drivers that offer long-term sustainability. The country is capitalizing on its demographic dividend, with a young and aspirational workforce driving productivity and innovation. Continued enhancements in physical and digital infrastructure are accelerating connectivity, improving supply chains, and fostering greater economic integration. The governments increased capital expenditure, along with targeted initiatives such as the Production Linked Incentive (PLI) schemes, are catalysing manufacturing growth, fostering self-reliance, and attracting both domestic and foreign investment.

The International Monetary Fund (IMF) has acknowledged Indias economic resilience, highlighting its progress in formalization, digital inclusion, and robust institutional frameworks. As India continues to advance reforms, embrace technology, and strengthen its global trade linkages, it remains poised to be a key engine of global growth in the coming decades.

Given this background, the Directors affirm that the Companys investments are guided by a long-term vision, with a focus on sustainable value creation. These investments are strategic in nature, aligned with the Companys commitment to building enduring value over time rather than pursuing short-term gains.

As part of the Companys capital allocation strategy, there is a clear emphasis on unlocking intrinsic value across its portfolio to enable greater value creation in the years ahead. The Company will continue to adopt a disciplined, patient capital approach—deploying funds prudently across a diversified mix of equities, real estate, fixed income instruments, alternative assets and/or operating businesses. Notably, subsequent to the financial year-end, the Company divested its stake in the property in Whitefield, representing a significant step towards unlocking value and strengthening the base for future growth.

Equities: The Company maintains a positive long-term outlook on equity markets, underpinned by improving macroeconomic indicators, a stable political environment, and strong corporate earnings momentum. Indias structural growth drivers—such as formalization of the economy, rising digital adoption, infrastructure expansion, and robust domestic consumption—are expected to continue supporting equity valuations. Easing inflationary trends and potential monetary policy easing by global and domestic central banks further enhance the outlook. Over the long term, equities remain a key driver of capital appreciation and are well-positioned to benefit from both cyclical and structural tailwinds in the Indian economy.

Fixed Income (Debt): The outlook for fixed income investments remains favorable, particularly as interest rate cuts are increasingly anticipated in response to a moderating inflation trajectory and slower global growth. In India, the Reserve Bank of India is expected to shift towards a more accommodative stance in the coming quarters, which could translate into lower yields and a corresponding rise in bond prices. Long-duration Indian Government Bonds (IGBs) are especially well-placed to benefit from this environment. Additionally, the inclusion of Indian government securities in global bond indices is likely to attract sustained foreign inflows, enhancing market depth and liquidity. The Company continues to view high-quality debt instruments as a stable component of its long-term portfolio, offering both income and capital preservation.

Real Estate: The real estate sector, after a prolonged period of subdued performance, is exhibiting signs of a structural recovery, supported by improving demand fundamentals and increased institutional participation. Urbanization trends, a revival in housing demand—particularly in mid-income and premium segments—and regulatory reforms such as RERA have enhanced transparency and investor confidence. Additionally, favourable borrowing conditions and improved affordability are driving real estate activity across both residential and commercial segments. The Company is actively evaluating select opportunities within this asset class, with a view to participating in its long-term growth trajectory. Real estate is expected to serve as both a store of value and a potential source of capital appreciation over time, thereby complementing the Companys broader investment strategy.

Looking ahead, the Company will also evaluate opportunities across alternative asset classes and select operating businesses, with a view to further diversifying its investment portfolio and enhancing long-term value creation. This includes potential allocations to private equity, infrastructure platforms, and other high-conviction alternatives that offer differentiated return profiles and lower correlation to traditional asset classes. Investments in operating businesses may also be considered where strategic alignment, scalability, and sustainable cash flow generation can be achieved. These opportunities will be pursued with a disciplined and selective approach, consistent with the Companys philosophy of deploying patient capital to unlock long-term growth.

The Company has an Internal Control System commensurate with the size and scale of its operations. The Company has in place internal control systems and procedures which are commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Companys resources, accuracy in financial reporting and due compliance with statutes, corporate policies and procedures. Internal Audit is conducted periodically by Chartered Accountant/ Audit firms who verify and report on the efficiency and effectiveness of internal controls.

All the related party transactions that were entered during the year, were in the ordinary course of business. The Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company materiality of related party transactions. Hence, the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required.

Further, there are no materially significant Related Party Transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons.

The Policy on materiality of related party transaction as approved by the Board may be accessed on the Companys Website, www.alfredherbert.co.in. Your directors drew attention of the members to Note 36 to the Standalone financial statement which sets out related party disclosures.

The Company is not required to set up an Internal Complaints Committee as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The employees have however been informed about lodging their complaints if any, before the Board as well as before the Local Complaints Committee (LCC) formed by the Government in the district. We affirm that adequate access has been provided to any complainant who wish to register a complaint.

No complaint was received during the year.

No application has been made under the Insolvency and Bankruptcy Code either by or against the company, hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

Pursuant to the provisions of Section 125 of the Companies Act, 2013, the declared dividend for the financial year 201617, which remained unpaid or unclaimed for a period of seven years, have been transferred by the Company on 6th September, 2024 to the IEPF established by the Central Government pursuant to Section 125 of the said Act. As on 31 st March, 2025, the Company has transferred Rs 27,520.00 to Investor Education and Protection Fund. Pursuant to the provisions of Section 125 of the Companies Act, 2013, the declared dividend for the financial year 2016-17, which remained unpaid or unclaimed for a period of seven years, will be transferred by the Company to the IEPF established by the Central Government pursuant to Section 125 of the said Act. The company has uploaded the full details of Unpaid Dividend on its website at https://www.alfredherbert.co.in/ investors.

The Company, in pursuance to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules 2016"), had transferred all shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years in the name of designated demat account of the IEPF Authority. A notice had been sent to all concerned shareholders at their registered address. The Company had also published such notice in English Newspaper i.e. The Financial Express and in Bengali Newspaper i.e. Ekdin informing the concerned shareholders about the same. The company has uploaded the full details of such shareholders and shares transferred to IEPF account on its website at www.alfredherbert.co.in

As on 31st March, 2025, the Company has transferred 1340 no. of shares to IEPF Demat Account which accounts to 0.17% of total shareholding of the company.

Statements in this Report, particularly those which relate to Management Discussion & Analysis, describing the Companys objectives, projections, estimates, expectations or predictions and the Economic Scenario may be forward looking statements within the meaning of applicable laws or regulations. Actual results could however differ materially from those expressed or implied.